FDA Report Says Psoriasis Drug Works

An experimental drug made by Genentech Inc. and Xoma Ltd. is effective against psoriasis but slightly raises the risk of side effects such as pneumonia or other infections, a U.S. regulatory staff report said.

Xoma’s shares surged the day before a committee of dermatology experts that advises the Food and Drug Administration was to vote on whether to recommend approval of the drug, called Raptiva, as a new treatment for moderate to severe psoriasis.

Raptiva, estimated by analysts to eventually reach peak sales of about $400 million a year, is not expected to be a blockbuster drug for Genentech, but it would be Xoma’s first commercial product.

Xoma shares rose $1 to $9.40 on Nasdaq. Genentech jumped $2.77 to $83.52 on the New York Stock Exchange.